Strategic Competitive Practices and Performance of Insurance Firms in Nairobi City County, Kenya

Abstract

Insurance companies have faced stiff competition that has led to price wars hence the need for the companies to align their competitive strategies. The Kenyan insurance market has had a shift in trends over the recent past characterized by a number of insurance firms developing innovative products to meet the demanding technological shift for the clients. The purpose of the current study was to assess the relationship between strategic competitive practices and performance of insurance firms in Nairobi City County, Kenya. The study sought to specifically determine the influence of differentiation, cost leadership, market focus, as well as customer relationship management strategies and their perceived influence on the performance of insurance firms. The study was anchored on: Resource Based View, Dynamic Capability, and the Institutional theories. The study adopted descriptive design, and this being a census study, all the 52 insurance firms were targeted. The primary data was collected through semi structured questionnaires. The collected data was analyzed both descriptively and inferentially by use of SPSS version 24.0 programme. Data was presented by use of frequency distribution tables. From the study results, cost leadership strategy was found to have a major contribution. However, customer relationship management strategy was found to have had the least contribution to performance of these insurance firms. Following the study results, the outcome of the study will be of significant contribution to insurance company’s management, regulators and policy makers for competition in the insurance industry, as well as future researchers in the insurance sector.

Keywords: Insurance, Performance, Cost, Market Focus, Strategy, Customer Relationship.

DOI: 10.7176/EJBM/14-7-06

Publication date: April 30^th 2022